ICSID: Jurisdiction investments as well,7 especially when the

investment continued to exist past the date of entry

 The jurisdiction of the Centre shall extend to
into force.8 Some tribunals have however refused to
any legal dispute arising directly out of an
follow this approach, positing that in the absence of
investment, between a Contracting State (or
explicit wording in the applicable treaty, investments
any constituent subdivision or agency of a
acquired or made prior to the entry into force of the
Contracting State designated to the Centre
treaty are not protected.
by that State) and a national of another
Contracting State, which the parties to By application of the principle of non-retroactivity
the dispute consent in writing to and unless otherwise provided for in the relevant
submit to the Centre. When the parties investment agreement:
have given their consent, no party may
withdraw its consent unilaterally. a. Tribunals have jurisdiction ratione
temporis for disputes that arose after the
Jurisdiction ratione materiae treaty’s entry into force. The date on which
the dispute arose must be determined
The jurisdiction ratione materiae, or subject- objectively.11 See further Section IV.D below
matter jurisdiction, of the Centre under Article and Dispute existence, Section III.B.
25(1) is thus defined as “any legal dispute b. Tribunals’ jurisdiction does not
arising directly out of an investment.” extend ratione temporis to alleged breaches
that took place prior to the making of an
Therefore, ICSID’s subject-matter jurisdiction,
investment.12 This is also true for the
as defined in Article 25(1), has three components: continued effects of a violation that occurred
a) the requirement of a legal dispute; prior to the making of the
b) the requirement that the legal dispute arise investment. However, previous litigation
13

on the same issues and the fact that the

directly out of the underlying
dispute was foreseeable do not necessarily
transaction; and
bar the tribunal’s jurisdiction,14 in the
c) that such underlying transaction qualify absence of bad faith.
as an investment.
First qualification: continuous and composite
These three elements will be covered in acts
separate sections of this Module
Second qualification: provisional application of a
treaty
Jurisdiction Ratione Temporis
Third qualification: disputes arising before the
Jurisdiction ratione temporis refers to the effect of entry into force of a treaty
time on a tribunal’s powers pursuant to a treaty.
Such effects are usually directly dictated by express “National of another Contracting State”
language contained in the applicable treaty. In the a) any natural person who had the nationality
absence of express provisions in such treaty, of a Contracting State other than the State
tribunals will decide the issue by reference to party to the dispute on the date on which the
customary international law. parties consented to submit such dispute to
conciliation or arbitration as well as on the
date on which the request was registered,
but does not include any person who on
Investment agreements commonly state that either date also had the nationality of the
investments made prior to their entry into force are Contracting State party to the dispute; and
covered by the investors’ substantive protection of b) any juridical person which had the
the agreement.6 Where a treaty is silent on this nationality of a Contracting State other than
issue, it is commonly understood that investments the State party to the dispute on the date on
made before the treaty’s entry into force are covered which the parties consented to submit such
 dispute to conciliation or arbitration and any  Rule 5 - Receipt of the Request and Routing
juridical person which had the nationality of of Written Communications
the Contracting State party to the dispute on  Rule 6 - Review and Registration of the
that date and which, because of foreign Request
control, the parties have agreed should be  Rule 7 - Notice of Registration
treated as a national of another Contracting  Rule 8 - Withdrawal of the Request
State for the purposes of this Convention.

Consent
The Request and Its Contents
 Consent by a constituent subdivision or
(1) Any Contracting State or any national of
agency of a Contracting State shall require
a Contracting State wishing to institute
the approval of that State unless that State
proceedings under the Convention on the
notifies the Centre that no such approval is
Settlement of Investment Disputes between
required.
States and Nationals of Other States
 Consent of the parties to arbitration under
(“Convention”) shall file a request for
this Convention shall, unless otherwise
arbitration or conciliation together
stated, be deemed consent to such
with the required supporting
arbitration to the exclusion of any other
documents (“Request”) with the
remedy. A Contracting State may require the
Secretary-General and pay the lodging fee
exhaustion of local administrative or judicial
published in the schedule of fees.
remedies as a condition of its consent to
(2) The Request may be filed by one or
arbitration under this Convention.
more requesting parties, or filed jointly
The Secretariat is authorized to administer by the parties to the dispute.
mediations that relate to an investment, involve a
Must include...
State or an REIO, and which the parties consent in
writing to submit to the Centre. a) state whether it relates to an arbitration or
conciliation proceeding;
Reference to a State or an REIO includes a
b) be in English, French or Spanish;
constituent subdivision of the State, or an agency of
c) identify each party to the dispute and provide
the State or the REIO. The State or the REIO must
its contact information, including electronic
approve the consent of the constituent subdivision
mail address, street address and telephone
or agency which is a party to the mediation pursuant
number;
to paragraph (1), unless the State or the REIO
d) be signed by each requesting party or its
concerned notifies the Centre that no such approval
representative and be dated;
is required.
e) attach proof of any representative’s authority
Each party may be represented or assisted by to act; and
agents, counsel, advocates or other advisors, whose f) if the requesting party is a juridical person,
names and proof of authority to act shall be state that it has obtained all necessary
promptly notified by that party to the Secretary- internal authorizations to file the Request
General (“representative(s)”). and attach the authorizations.

ICSID INSTITUTION RULES The Request shall include:

 Rule 1 - The Request a. a description of the investment and

 Rule 2 - Contents of the Request of its ownership and control, a
 Rule 3 - Recommended Additional summary of the relevant facts and
Information claims, the request for relief,
 Rule 4 - Filing of the Request and Supporting including an estimate of the amount
Documents of any damages sought, and an
indication that there is a legal dispute
 between the parties arising directly (ii) if that party had the nationality of the
out of the investment; Contracting State party to the dispute on
b. with respect to each party’s the date of consent, information
consent to submit the dispute to concerning and supporting documents
arbitration or conciliation under demonstrating the agreement of the
the Convention: parties to treat the juridical person as a
(i) the instrument(s) in which national of another Contracting State
each party’s consent is pursuant to Article 25(2)(b) of the
recorded; Convention
(ii) the date of entry into force
Constituent Subdivision or agency of a
of the instrument(s) on
Contracting State
which consent is based,
together with supporting (i) the State’s designation to the Centre
documents demonstrating pursuant to Article 25(1) of the
that date; Convention; and
(iii) the date of consent, which (ii) supporting documents demonstrating the
is the date on which the State’s approval of consent pursuant to
parties consented in Article 25(3) of the Convention, unless
writing to submit the the State has notified the Centre that no
dispute to the Centre, or, if such approval is required.
the parties did not consent
on the same date, the date
on which the last party to Concerning the formal conditions required in
consent gave its consent order to have valid consent, Article 25.1 of the
in writing to submit the Washington Convention (hereinafter "the
dispute to the Centre; and Convention") states only one condition: that the
(iv) an indication that the consent be given in writing. Regarding the
requesting party has moment at which consent must be expressed, one
complied with any may deduce from the Convention that it must have
condition for submission been given prior to the filing of a request for
of the dispute in the conciliation or arbitration, since this request must, in
instrument of consent; order to be registered, state the date and the nature
If a Party is: of the documents relating to the consent of the
Parties (G.R. Delaume, Le Centre International pour
Natural Person Ie reglement des Differends relatifs aux
Investissements (CIRDl), in JD11982, p. 775 et
(i) information concerning that person’s
seq.). The consent to which Article 25.1 of the
nationality on both the date of consent
Convention refers may have three sources:
and the date of the Request, together
with supporting documents (i) a clause contained in a contract
demonstrating such nationality; and concluded between the State and
(ii) a statement that the person did not have the investor;
the nationality of the Contracting State (ii) national law, usually a Code or an Act
party to the dispute either on the date of on investments; or
consent or the date of the Request (iii) international law, by way of a clause
contained in a bilateral or
Juridical Person
multilateral agreement.
(i) information concerning and supporting
Consent of States is twofold. Firstly, they have to
documents demonstrating that party’s
become members of the Convention. Secondly, they
nationality on the date of consent; and
have to agree on submitting a specific dispute or • The project should have a certain duration.
certain categories of disputes to the ICSID. • There should be a certain regularity of profit
and return.
• There is typically an element of risk for both
In Salini v. Morocco, two objections to subject- sides.
matter-jurisdiction were raised. The first was that • The commitment involved would have to be
construction contracts did not fall under the substantial.
definition of investment contained in the bilateral • The operation should be significant for the
treaty which formed the basis for consent. The host State’s development.
second objection was that construction contracts did
These features should not necessarily be understood
not qualify as investment under the ICSID
as jurisdictional requirements but merely as typical
Convention.
characteristics of investments under the Convention
As regards the first objection, the tribunal rejected
an interpretation of the BIT based on the host
State’s domestic law. It held that the contract fell
within the categories listed in the treaty.

The tribunal then turned to the second objection, i.e.

that the contract did not qualify as an investment
under the ICSID Convention. It considered the
criteria generally identified by commentators
for defining investment under the Convention.
These were:

 a contribution,
 a certain duration,
 participation in the risks of the
operation, and
 that the operation should contribute to
the development of the host state
(based on the preamble of the ICSID
Convention).

The tribunal found that each of these criteria

were met by the construction contract.

As regards the element of risk, the tribunal added

the following observation:

It matters little in this respect that the risks have

been freely agreed to. It similarly matters little that
the contractor’s remuneration is not tied to the
exploitation of the work being constructed. A
construction project that spans several years and
whose cost cannot be established with certainty
beforehand creates a manifest risk for the
contractor.

While it is not possible to give a precise definition of

“investment” it is possible to identify certain typical
features.
Article 25, par. 2 (b) regulates the nationality of
juridical persons establishing a general rule and an
exception.

The first one encompasses any juridical person

which had the nationality of a contracting state other
than the state party to the dispute on the date on
which the parties consented to submit such dispute
to conciliation or arbitration.

The second one includes any juridical person which

had the nationality of the contracting state to the
dispute in the date when the parties consented to
submit dispute to conciliation or arbitration ad
which, because of foreign control, the parties agreed
should be treated as a national of another
contracting state for the purposes of the Convention.

How to determine nationality:

(1) Place of Incorporation;

(2) Head Office; or
(3) Ownership and control.